Picture this: You are walking through an art fair, and suddenly, your eyes catch a glimpse of a painting that ignites something inside of you; your heart slows down, your pupils dilate, and you feel a rush of energy – of connection. You must have it and are sure that if you don’t buy this work immediately, someone else will! How many of us have found ourselves in this scenario? Works of art have the ability to spark a deep, visceral reaction within us, leading buyers to make purchases without deeper consideration, research, or verification, sometimes leading to disappointment or misfortune. What should collectors do to shelter themselves against unwise purchases?

Decisions about where to purchase works of art should be a collector’s top consideration. However, most assume they are completely protected by just relying on a known gallery, auction house, or an art dealer’s reputation. You may find out that even the most respected dealers can dish up trouble. Once, the New York gallery, Knoedler & Co. was considered one of the most respected art dealers in the United States; clients even considered the gallery director a trusted and personal friend. After the gallery’s sales of more than $80 million in forgeries to some of its top clients, the ultimate closure of the gallery, and many lawsuits later, prudence is the now the thought for the day.

This is not a one-off: other instances of failed relationships with art dealers include Sotheby’s $10 million sale of a 17th-century Dutch painting attributed to Frans Hals that turned out to be a forgery; Steve Martin’s purchase of a forged 1915 Heinrich Campendonk from a Paris gallery for $850,000; and there are also stolen works that enter the market. What can collectors do to protect themselves? At the minimum, take a step back before making an emotional or pressured purchase. It is important to know that establishing strong, working relationships with a gallery can be advantageous in garnering the best deals, but directors and staff have a fiduciary duty to generate income for the gallery first and foremost. Reputable dealers provide provenance and title, and are willing to put a work on hold if you feel it is necessary to have an expert conduct further due diligence; if not, that is a red flag, and you should walk away. Second, be careful to hire a credible expert. Parallel with art market prices reaching astronomical highs, there has been an explosion of self-proclaimed experts holding themselves out as credible scholars.

Reputable research consultants should be recognised in the field and provide credentials, and not work in vacuums. Most independent consultants work on a feebasis and not commission. Firms, such as Jacob Fine Art in Chicago, complete pre-purchase due diligence for international clients utilising the most reputable resources, and consulting with recognised experts to provide clients purchasing high-net-worth art with peace of mind and minimise future claims - sometimes within a few hours of receiving an inquiry.

In closing, I would like to remind readers of the maxim “Anything worth having, is worth waiting for.” Prepurchase due diligence can protect a collector’s dignity, reputation, collection, and estate for years to come. Purchasing a work of art after in-depth research provides peace of mind, and ensures that the collector is shielded from potential pitfalls that can be encountered in today’s art market.

Pricey collectibles such as art, wine and classic cars are high on the shopping lists of the ultra-affluent—and fraudsters are only too happy to provide them.Collectibles crime is a global industry that generates billions annually. The recent run-up in prices at international auction sales and the ease with which collectibles are transported across borders have fueled a burgeoning market for forgeries. Forty percent or more of the collectibles sold worldwide are likely counterfeit, experts estimate.

Jacob thinks the number of forgeries, especially counterfeit fine art paintings, is increasing because of the growth in global wealth and disposable income. “There’s more money being spent in the collectibles market than ever before in history. Where there’s money, there’s crime,” she says.

Recent examples of high-profile collectibles forgeries include those involving Knoedler & Company, one of New York’s oldest private galleries until it closed in 2011. Knoedler sold over $60 million worth of forged paintings that were passed off as masterpieces by artists such as Jackson Pollock, Mark Rothko and Robert Motherwell. The unsuspecting buyers included hedge fund managers and CEOs. In another prominent scam, celebrity wine dealer Rudy Kurniawan was convicted in December of mixing cheap wines in his kitchen to mimic the taste of pricier wines and making millions selling it to wealthy collectors, including billionaire William Koch.

According to a 2012 survey by Barclays, the rich collect primarily for the emotional gratification of owning one-of-a-kind pieces. Yet they increasingly view their treasures as a store of wealth and a source of capital growth. The survey Profit or Pleasure? Exploring the Motivations Behind Treasure Trends found that wealthy individuals have an average of 9.6% of their wealth in 10 different kinds of collectibles, including paintings and pictures, sculptures, tapestries and rugs, antique furniture, jewelry, classic cars, wine, stamps, coins and precious metals.

Fortunes And ForgeriesThe recent run-up in prices for some collectibles has been staggering. In The Wealth Report 2014, London-based real estate brokerage Knight Frank said its Luxury Investment Index of major collectibles grew 179% over the 10 years ending with the third quarter of 2013, a compound annual growth rate of 10.8%. All nine categories in the index rose in value, except collectible furniture, which was down 19%. Vintage cars performed best, soaring 456% over the 10-year period, followed by stamps, coins, art, wine and jewelry, which rose 250%, 227%, 193%, 176% and 156%, respectively.

High-end collectibles may be excellent long-term investments, but they carry risks. They’re relatively illiquid and notoriously difficult to value. Their returns can be volatile, and they’re subject to the whims of changing artistic tastes, as well as fads and bubbles.

Yet the most significant investment risk may very well be the increasing likelihood of buying a forgery. The market for collectibles, including fine art, is the largest unregulated market in the world.

New wealth creation in the BRIC countries of Brazil, Russia, India and China is allowing collectors to repatriate exquisite treasures that were sold abroad years ago. As prices have skyrocketed in response to demand, so have the number of counterfeits. Experts say the collectibles market in China is particularly susceptible to fraud because the pace of wealth creation has been too rapid for regulators to manage.

Nevertheless, it’s a mistake to think that all the newer forgeries are coming from China, says Annelien Bruins, chief operating officer and senior art advisor at New York-based Tang Art Advisory, which assists private and corporate clients in buying, selling and managing fine art and other collectibles. “The art market is so international, you can produce forgeries anywhere,” she says.

While it’s hard to say precisely which collectibles are most often counterfeited, criminals who forge fine art paintings seem to favor the 20th century. For one thing, older paintings, such as those from the Renaissance period, require more skill to counterfeit. The forged works of some modern artists, Pablo Picasso and Salvador Dalí, for example, are also easier to pass off because the artists were so prolific.

Counterfeiting wine is a relatively new deception. It began in the late 1970s when prices escalated for high-end wines from France’s Bordeaux region. Some criminals print sham labels and put them on bottles of cheaper wines. Others buy the empty bottles and corks of prized vintages (often from sommeliers at high-end restaurants), then refill and recork the bottles.

Counterfeit U.S. coins have been produced in China for decades. “The counterfeits used to be crude, with easily detectable errors, pitting and tool marks. Now they’re much more sophisticated and harder to detect,” says Matt Erskine, a fourth-generation estate-planning attorney and principal in Worcester, Mass.-based Erskine Company.

Erskine, whose family has been collecting rare coins and other valuables since the mid-1600s, says there’s a middle-market sweet spot where fraudsters can earn enough money to make the risk worth it, without attracting too much scrutiny. It takes counterfeiters a fair amount of time and effort to make decent forgeries. “They tend to copy collectibles that will bring enough value to compensate them for making the items, but are not so valuable that they attract a lot of attention. The easiest things to forge are those that were made in the thousands, if not hundreds of thousands—coins, stamps, books—because you can take one and modify it slightly to make it look rarer.”

Tip-Offs To Rip-OffsModern science has made fraud detection somewhat easier through technologies such as ultraviolet fluorescence, infrared analysis, X-rays and carbon dating. There are, however, limits to the usefulness of these tools. Autograph forgers, for example, have been known to put the signatures of Babe Ruth, Lou Gehrig and Mickey Mantle on old baseballs. Authentication requires more than just determining the age of the balls; it takes an expert in baseball memorabilia.

Forging artists’ signatures and putting counterfeit paintings in old frames stamped with the names of prominent auction houses are timeworn tricks. But fraudsters are also using new ploys, such as leaving items outdoors to weather-age them and adding authentic pieces to otherwise forged antique sculptures and furniture to subvert carbon dating. “They’re becoming smarter at circumventing technology,” says Bruins.

Not surprisingly, many fakes that start out as harmless replicas are later hawked as authentic works by unscrupulous collectors, dealers and auction houses. The fraud occurs when sellers portray the items as real, when they know they’re not.

Industry insiders say a code of silence exists when it comes to forgeries. Some wealthy collectors are simply too embarrassed to admit they’ve been duped. Others who suspect that their pieces are forged want to avoid casting doubt on the authenticity of the works, thereby reducing their value. Rather than come clean, some attempt to unload their forgeries on others.

Jacob, who has worked with the FBI and Interpol to help stop collectibles crime, says she once telephoned a client to report that a fine art painting was not genuine, then added it to her database of fakes and forgeries. When she sent a written report on the piece’s inauthenticity by courier (which the client asked her not to send), the client refused delivery and retuned the package unopened. “What do you think that person is going to do with that work of art?” she asks.

Trust, But VerifyThere are only two sure ways for clients to avoid forgeries—either become connoisseurs in the items they’re collecting or hire recognized experts to vet the items.

Becoming an expert takes time and diligence. With some collectibles, it’s particularly hard to gain the proficiency to distinguish genuine items from clever forgeries. The taste of wine, for example, can vary greatly depending on how well (or poorly) it was stored. The labels or corks might be a better indicator of authenticity. Incompetent fraudsters have been known to misprint château labels and place the wrong corks in bottles.

A number of services exist that can help advisors and their clients authenticate various items, such as the Certified Guaranty Company, which grades comic books and magazines, and Professional Sports Authenticator, which evaluates memorabilia such as trading cards, balls and uniforms. Companies that grade coins with numismatic value and weed out forgeries include Professional Coin Grading Service and Numismatic Guaranty Corporation.

Locating competent and independent experts may require some serious detective work. Anyone can claim that a collectible is authentic, based solely on personal opinion. If an “expert” is wrong, his or her opinion may not necessarily be legally actionable. Jacob says it’s crucial to get recommendations and check credentials. “There are people who have held themselves out as experts who have not written a book, put together an exhibition in any museum or contributed to any kind of scholarship,” she says.

Bruins, whose firm performs research to ensure that clients don’t buy a forgery or overpay for an item, recommends getting a second opinion on very expensive pieces. “Price information is not always easy to come by. Two experts may disagree on the value. There’s a level of subjectivity in art valuations,” she says.

For well-known works, due diligence often starts with checking the artist’s catalogue raisonné, a comprehensive scholarly reference text that includes each work known to have been created by a particular artist, with information such as the title of each piece and any alternative titles, along with inscriptions, dates, mediums, sizes, exhibition histories and the “provenance” of each item. Provenance is essentially the chronology of ownership, custody or location of a work since the artist created it.

Verifying provenance doesn’t just help determine whether a work is authentic, it also provides clues about who has legal title to the piece. Many collectibles are subject to theft, wartime looting, archaeological looting and smuggling. Clients who purchase costly collectibles should at minimum check stolen property databases such as the Art Loss Register, a worldwide catalogue of over 400,000 pilfered paintings, sculptures, jewels and other items.

But Judith Pearson, president of New York-based ARIS Title Insurance Corporation, says stolen items account for only 25% of title exposures in the collectibles markets. Seventy-five percent of the risk comes from encumbrances, such as creditor and tax liens, and issues involving lack of legal authority to buy, sell, give, donate or loan items. Title insurance helps protect against the risk of title defects that could result in the loss of multimillion-dollar pieces through litigation.

Pearson cautions that common phrases on provenance documents, such as “owned by a private collector” and “sold by a dealer,” are signs of the market’s opacity. Although wealthy collectors often wish to keep their ownership of important works confidential to avoid becoming targets of thieves, vague terms can also mean trouble. “Those red flags, or what we would call ‘gaps in ownership,’ may be really small gaps, or really big gaps, but gaps almost always exist,” says Pearson.

Pearson says ARIS can reduce the risks of title defects through underwriting protocols and access to confidential ownership information that transacting parties often don’t, or won’t, share with each other. “We identify the gaps, determine how defensible they are and insure over them,” she says.

Erskine recommends that his clients ask for title insurance policies when purchasing expensive collectibles, in part because even buying through reputable auction houses is not enough protection. Auction houses perform some due diligence, but as the seller’s agent, they can typically rely on the seller’s representations about ownership without assuming legal title risks. Unless they’ve committed fraud, the limited warranties that auction houses provide will generally absolve them of responsibility for selling items with title defects.

In the “buyer beware” world of collectibles, the greater a client’s desire to believe that a unique piece is a once-in-a-lifetime buying opportunity, the more caution an advisor should likely urge.

As Erskine puts it, “There are probably new scams being thought up every day. And the number detected is nowhere near the number actually being perpetrated. Even the most experienced collector can get scammed, so if the deal sounds too good to be true—it probably is.”

June 2014, and an unusual three-day conference is taking place in the basement room of New York University’s School of Law. The 200 or so attendees that have hurried their way across sunny Washington Square include FBI agents, lawyers, auction house heads, art dealers and collectors who buy and sell multi-million--dollar items.

Waiting, sharp-suited, is -Brooklyn-born conference organiser Chris Marinello, arguably the world’s most experienced art hunter (£350m’s worth recovered so far) and founder-director of London-based Art Recovery International. The conference is titled “Fakes, Forgeries, and Looted and Stolen Art” and these industry bigwigs are here to discuss the vastly underestimated and booming business of art crime. As we take our seats, a lawyer comments that “three days is extremely ambitious to fit all that in”.

He’s not kidding.

If it seems hard to imagine that art crime is, according to the US Department of Justice and Unesco, the third highest-grossing criminal trade over the past 40 years (just behind drugs and weapons), then consider that the art trade is the largest lawful unregulated business on the planet, leaving hardly any paper trail for detectives to follow. Buying a sculpture or painting is just like acquiring a bicycle from Gumtree or Craigsl-ist. We wouldn’t buy a house without a deed, yet people do this with art worth millions of dollars all the time.

There are also no transaction records. There is no legal requirement to publicly list art sales. The only chain of title that exists in art is “provenance”, a potted history full of blanks, anomalies and guesswork. In the US, there’s one art crime officer for every 21 million people (that’s sixteen in total) and New Scotland Yard in the UK has just two-and-a-half officers (one is part time).

Among the speakers at the conference are Bob Goldman and Bonnie Magness-Gardiner, the Mulder and Scully of the FBI, in that they run a tiny, underfunded department (Art Theft) that no one else seems to believe in. Blonde, mustachioed Bob, who left the FBI to become a lawyer for white-collar-crimes, is still passionate about recovering stolen art. He’s the first to admit “it’s a dismal effort”.

Thanks to lack of regulation accurate figures for the art market as a whole are impossible to ascertain, but Christie’s and Sotheby’s together turn over about $11-12 billion a year and a 2008 survey by ARTnews, the world’s most widely circulated art magazine, estimated that annual private art sales amounted to $30 billion.

The amount of criminal income generated by art crime each year is thought to be $6-8 billion, according to the FBI. In the UK, the value of art and antiques stolen each year is around £300m, second only to drug dealing and more costly than the theft of stolen vehicles. These figures are woefully inaccurate simply because we can’t possibly know about every single illegal trade that takes place, with some stolen, looted or forged pieces being sold multiple times. Worldwide, some 50,000-100,000 works of art are stolen each year. Not surprisingly only about 10% of stolen art is recovered, and successful prosecution occurs even less frequently.

CLEAN SWEEPS

Anthony Amore, another former federal agent speaking at the conference, has been head of security at the Isabella Stewart Gardner Museum in Boston since 2006. He is hunting artworks worth $500m stolen from the Gardner in 1990.

A night shift security guard made “the most expensive private security error in history”, according to Amore, when he buzzed in two men claiming to be police officers who made off with, among others, Rembrandt’s Christ in the Storm on the Sea of Galilee (1633) and Vermeer’s The Concert (1664).

Milton Esterow, 85 was, for 38 years, the owner of ARTnews, and has -covered countless art crimes. He agrees that poor security fuels thefts. “After the 1911 theft of the Mona Lisa, guards performed an inventory of the Louvre and found another 323 paintings were missing.” Magness-Gardiner confirms, shockingly, that this is still a common finding today. In 2012, the Californian city of San Francisco hired an art detective to hunt for hundreds of items that had gone missing from its 4,000-piece public -collection.

The conference room is packed when Chris Marinello takes to the stage with Marianne Rosenberg, the star draw. Rosenberg and Marinello are at the heart of the fight to end the continuing trade in Nazi-looted art and are currently embroiled in what has become the most infamous stolen art case in history. Rosenberg is the granddaughter of Parisian art dealer Paul Rosenberg. From 1911, at his gallery at 21 rue de la Boétie, Paul Rosenberg charmed wealthy French patrons into paying top dollar for the works of Delacroix, Rodin, Cézanne, Manet, Degas, Monet, Renoir, Lautrec, Modigliani, Braque, Matisse and best friend Pablo Picasso, who lived next door. Forced to flee France by the Nazis, who stole the bulk of the Jewish art dealer’s world-class collection (400 works), Rosenberg moved to New York. He spent the rest of his life – as did thousands of other Jewish families – hunting for his treasures, originally bought for hundreds of dollars, today worth many millions.

His granddaughter is still trying to track down the 60-odd missing paintings that remain and has recently recovered, with the aid of Marinello, Monet’sWaterlillies (1904) and Matisse’s Woman in Blue in Front of a Fireplace(1937) from two separate museums, both of which had to be cajoled into giving them up even after being presented with irrefutable evidence, including papers signed by Herman Goering, claiming the Matisse for the Reich.

The case that everyone has come to hear about today, however, is that of 81-year-old Munich-based hermit, Cornelius Gurlitt, son of Nazi art dealer Hildebrand Gurlitt.

Starting in 1938, Hildebrand purged what the Nazis termed “degenerate art” (almost all modern art) from German state collections and bought works, mainly old masters, for the Führermuseum, to be built in Hitler’s adopted hometown of Linz, Austria.

The campaign quickly became one of confiscation as the focus shifted to the galleries and homes of Jewish collectors.

Interviewed by the Monuments Men at war’s end, Hildebrand Gurlitt convinced them that he’d handed over all he had. The truth was rather different. After the war, he joined other former Nazi-collaborating art historians, dealers and museum heads in Munich, where they conspired to create a market, using a Swiss-Liechtenstein network, for their looted artworks, which is still operating today.

Hildebrand Gurlitt died in a car crash in 1956 but Cornelius continued to sell from the hoard. Questioned by customs on a train from Zurich to Munich in September 2010, unemployed Gurlitt was found to have €9,000 in crisp €500 notes from a Swiss art dealer. An investigation was launched and customs officials found 1,280 Picassos, Chagalls and Gauguins, amongst others, worth at least $1billion, packed into Gurlitt’s otherwise modest Munich apartment.

Incredibly, the trove was an open secret among some art dealers. Speaking to Professor Jonathan Petropoulos, author of The Faustian Bargain: The Art World in Nazi Germany, an unnamed dealer said: “In Munich art-dealing circles one knew that the Gurlitt family had [or “disposed over”] an extensive collection of art.” The full list has not been made public. But one of the most valuable paintings in the trove has been revealed: Matisse’s Seated Woman/Woman Sitting in Armchair (1921), stolen from a bank vault rented by Paul Rosenberg by the Nazis on September 5th 1941.

Rosenberg and Marinello immediately submitted a detailed claim to the German government. “I also wrote to Gurlitt directly,” Marinello said. “He offered to sell us the Matisse.” The answer was No. Gurlitt then suggested auctioning the work, offering a 50/50 split. “Our one and only offer was of unconditional restitution,” Marinello said. “We do not negotiate because it creates a horrible precedent,” Marianne Rosenberg confirmed.

Gurlitt agreed, eventually. Marinello was within hours of collecting the painting when Gurlitt sacked his lawyer. During the delay this caused, a false claim was made for the same painting. Three weeks later, on May 5th, 2014, Marinello was again within a hair’s breadth of recovering the Matisse when Gurlitt died.

CRIME AND RESTITUTION

On June 12th 2014, Ingeborg Berggreen-Merkel, head of the committee charged with establishing the provenance of the Gurlitt trove said they agreed that Matisse’s Seated Woman/Woman Sitting in Armchair is “Nazi-looted art that legally belongs to the Paul Rosenberg collection”.

Great news. Except for one thing. Even though Gurlitt signed an agreement with the German government stating that works determined to have been looted must be returned to the victims’ descendants, he willed his collection to the Kunstmuseum in Bern, Switzerland, which is at the moment deciding whether to accept.

Although Marianne Rosenberg and her family (her 90-something-year-old mother is still alive) will have to wait a while longer, they shouldn’t have to. The Washington Principles, signed by 44 nations in 1998 and reaffirmed by 47 nations in 2009, state that Nazi-confiscated art must be identified, that all relevant records and archives be accessible on a central registry and that art being sold with second world war provenance gaps must be given extra consideration.

After all, as US officials put it, thousands of American soldiers had given their lives to make sure all of Hitler’s depredations were undone. Not returning the art was like helping the Nazis.

None of these aims have been universally achieved. For example, May 29th this year was the first time any German art dealer made its records from the Nazi era public when the Neumeister auction house (known as Weinmüller’s before the war) put the list of stolen pieces online (lostart.de).

Weinmüller sold a total of 32,000 Nazi-looted works of art between 1936 and 1944 and held a further 35 auctions before his death in 1958. The list (discovered by chance in an air conditioning cabinet in March 2013) is almost three times as long as Hildebrand Gurlitt’s. The unregulated nature of the art business makes looted and stolen works easy to sell, their true provenance unnoticed, time and again.

The outspoken, elderly American dealer Richard Feigen opened his first gallery in 1957, exhibiting German expressionist and surrealist art. Feigen is one of many dealers at the New York conference who makes the point that too many people in the art world simply “look the other way”.

Esterow agrees. “Some dealers are not operating illegally but without ethics,” he says. “How much truth there is in that statement, we’re still trying to find out. Many art sales are made privately and galleries don’t talk about them.”

The temptation is for dealers to turn a sale around quickly for a large commission/profit. “The art market is going insane,” Esterow says. “Prices are berserk ... Five years ago Forbes listed 900 billionaires in the world. This year it’s 1,346. Instead of buying houses, horses or a slew of girlfriends they are buying art.”

Recent private sales include Gustav Klimt’s Portrait of Adele Bloch-Bauer(1907) for $135m; Willem de Kooning’s 1955 Police Gazette (bought by hedge fund manager Steve Cohen) for $63.5m (Cohen also bought van Gogh’sPeasant Woman Against a Background of Wheat (1890) and Gauguin’sBathers (1902) – for about $120m in 2005); Jasper Johns’s False Start (1959) sold to hedge fund operator, Kenneth Griffin, for $80m (the public-auction record for Johns is $17.4m.)

Jane Jacob, art historian, provenance research Expert and president of Jacob Fine Art, is co-organiser of the conference on stolen art. “Some [investors] want to turn things around in two weeks which is impossible,” she says. “Due diligence often takes months.”

Should there be a licensing regime for dealers along with a code of conduct and regulators? The dealers at the New York conference are prepared to consider it, but no one is sure how this might be achieved. “Nothing’s all that effective right now,” Feigen says. “I saw a painting with poor war provenance vetted out of the Maastricht art fair, so the dealer sold it privately for a fortune. There’s a lack of communication across the industry.”

That lack of communication and commitment to the Washington Principles extends to museums, galleries and auction houses. Hugo Simon, a Jewish banker and finance minister based in Berlin and a supporter of many “degenerate” artists lost many works to the Nazis. He was also the owner of what recently became the world’s most expensive painting, Edvard Munch’sThe Scream, which he consigned to a Swiss gallery in 1937. Rafael Cardoso, Simon’s great-grandson believes that Simon only let the masterpiece go because of Nazi persecution.

The question is: did Simon consign the work in the normal course of business or did he have no choice? It was not clear he was paid for it. At the very least he probably saved this particular Scream (there are four versions) from destruction. Cardoso refused compensation offers from the consignor, Norwegian shipping magnate Petter Olsen, stating that his only issue was a moral one: “That the legacy of those who were wronged should be remembered and respected.”

The sale went ahead regardless, and The Scream was sold for a record-breaking $119.9m to New York billionaire Leon Black, before loaning it to New York’s Museum of Modern Art in May 2012.

Actions like this by museums, Cardoso believes, do harm to the memory of those who saved priceless works. One such person is Paul Rosenberg, who escaped to New York where he opened a gallery on 16 East Fifty-Seventh Street. In 1941 he sold a painting branded degenerate from the Nazis (who would have destroyed it) to MoMA. It was the first time it had been shown in a public museum. The painting is Van Gogh’s Starry Night.

FAKES AND FABERGE

The contribution of Jewish art dealers to world art cannot be underestimated – neither can the harm caused by Nazi-wrought destruction. No one knows what other masterpieces might have been lost, and what is still out there, waiting to be discovered.

A touch of regal flair and a slight change of direction (from paintings to trinkets) is brought to the conference by 73-year-old Géza von Habsburg, aka Archduke Géza of Austria, Prince Imperial of Austria, Prince Royal of Hungary, Croatia, and Bohemia, who is the world’s foremost expert on Fabergé – particularly the eggs.

Von Habsburg charms the audience with his knowledge and thick Austrian accent. “Ninety-nine percent of what is sent to me to authenticate are forgeries,” he says before telling the jaw-dropping story of an “unnamed gentleman” from a Middle Eastern country who acquired a Fabergé collection for $60m in a private sale. “Every single item was forged . . . I suggested that to him that perhaps he could ask for his money back.” The collector waved von Habsburg away, wanting to keep quiet about it.

No less entertaining is James -Martin, a tall, engaging scientist who uses hi-tech methods to expose fake paintings. Martin, the founder of Orion Analytical, describes the case of US forger, William Toye, who forged the work of Clementine Hunter, the daughter of slaves who started painting in her 60s. Her works sell for $5-$20,000, “perfect for staying under the radar,” Martin says. The FBI was having trouble nailing Toye when Martin noticed, from photographs, that the artist owned lots of cats that had free run of his studio. The easy way to tell if you have a Toye as opposed to a Hunter, Martin says, is to check for cat hairs painted into the canvas.

Toye is nothing compared to 63-year-old Wolfgang Beltracchi, however, who forged hundreds of paintings over a period of 35 years, earning millions and fooling top collectors and -museums. Beltracchi, who with long hair and beard looks every part the artist, is the best forger Martin’s been asked to scrutinise. Beltracchi’s name, oft-mentioned at the conference, is spoken with loathing. Feigen ended up with a Beltracchi Max Ernst, eventually exposed by Martin (58 Beltracchi fakes have been identified so far). “I know the Max Ernst expert who issued authentication certificates on these fakes,” Feigen says, “He’s a wreck now.”

Another Beltracchi Max Ernst La Forêt, (1927) was sold in 2004 for $2.4m after the same appraiser issued a certificate of authenticity. It was eventually sold to a collector for $7m. Beltracchi was sentenced to six years in 2011 (and he is able to go home during the day). The feeling at the conference (and this is putting it mildly) is that the authorities didn’t take his crimes seriously enough.

The biggest victim is art itself. Beltracchi claims hundreds of his fakes are hanging in museums across the world. And no one is going to risk buying a Max Ernst after Beltracchi; a similar situation arose with Salvador Dalí after the -market was flooded with fakes.

Closing the conference, just before the delegates rush off to swap horror stories at the evening reception, Marinello says: “It’s got to the point where it seems you have to have rocks in your head to buy art. You’ve got to perform due diligence, pay an appraiser, an art authentication expert, a provenance researcher, lawyers and even a scientist.”

In other words, it’s much easier to take up art crime. With little law enforcement, dealers prepared to look the other way and with no significant change in practice and regulation on the horizon, the business of fakes, forgeries, and looted and stolen art worth countless billions looks set to keep Marinello et al busy for decades yet.